Yahoo Finance Oil Prices Down Again In Asia Morning As U.S. Dollar Continues To Recover
Investing.com - Oil prices are down again Thursday morning in Asia, driven by a stronger dollar which outweighed the effects of a decrease in U.S. crude oil inventories.
Crude Oil WTI Futures for April delivery were trading at $61.01 a barrel in Asia at 11pm ET, down 1.09%. Brent crude futures for April delivery, traded in London, were down 0.40% at $64.88 per barrel.
The dollar rose beyond a one-week peak against other currencies on Wednesday, extending its recovery from three-year lows set last week as traders cut back on some of the bearish bets against the U.S. dollar.
The strengthening dollar makes greenback-denominated oil imports more expensive for other countries, thus curbing demand and dragging prices down.
This is despite an unexpected drop in U.S. crude oil inventories by 907,000 barrels to 420.3 million barrels for the week to Feb 16, according to The American Petroleum Institute on Wednesday.
The U.S. is still expected to continue increasing its production, as it has done by more than 20% since mid-2016 to more than 10 million barrels per day (bpd). At this rate of production increase, the U.S. is set to overtake Russia in crude oil output by late 2018, making it the largest global supplier.
This also means that the gap in production that the Organization of the Petroleum Exporting Countries (OPEC) is trying to create is simply being filled by U.S. shale, making OPEC’s attempt to reduce the global oversupply and control oil price volatility less effective.
Current prices have moved quite far from the highs of the beginning of February. WTI started February at $65.80 and Brent started at $69.65. However, a healthy demand-growth in Asia, particularly China, continues to support oil markets.
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